infrastructure

Industry groups welcome infrastructure fast-track, but say there is more to do

Groups representing the logistics and infrastructure sectors have welcomed the federal government’s focus on cutting approval times and increasing investment in infrastructure.

On Monday, June 15, the federal government announced an extra $1.5 billion for infrastructure projects as well as 15 priority projects, including Inland Rail, that would have approvals fast-tracked.

In his speech to the Committee for the Economic Development of Australia (CEDA), Prime Minister Scott Morrison said that the Commonwealth had a role to play in the environmental approval of projects. With delays under this legislation costing industry over $300 million in 2019, Morrison said the government aimed to reduce approval times from 40 days on average to 30, a 25 per cent cut over the 2020 year.

“Ultimately, our objective is the streamlining of Commonwealth and state processes to a point of ‘single touch approvals’,” said Morrison.

Australian Logistics Council CEO Kirk Coningham said these changes would be of great benefit to businesses that operate national supply chains.

“The Prime Minister’s commitment to addressing regulatory burdens that increase cost and compliance burdens on businesses that operate across multiple jurisdictions is especially welcome,” he said.

Coningham welcomed news that the Deregulation Taskforce will take a national leadership role in the removal of regulatory impediments from within the Prime Minister’s department.

“ALC agrees with the Prime Minister’s observation that many of our laws have not kept pace with the development of technology. There are numerous opportunities within the freight and logistics sector to more effectively deploy technology to advance the efficiency, safety and visibility of freight movement,” said Coningham.

Coningham said that ensuring continuing flexibility for freight operators will be key to the ongoing resilience of Australia’s supply chains.

Chief executive of Infrastructure Partnerships Australia Adrian Dwyer highlighted that enabling works to start immediately on priority infrastructure projects is a good step, but more should be done to revive the economy.

“Fast-tracking projects that respond to population growth and sectoral transformations in energy, transport, and resource recovery should be the priority moving forward,” he said.

“If the federal government wants to supercharge aggregate demand it should use its balance sheet capacity to deploy more money into new infrastructure projects.

“The federal government can and should redeploy the $60 billion saving from its recalculated JobKeeper program into a bold new infrastructure agenda.”

ALC lobbies for freight to receive JobKeeper subsidy

The Australian Logistics Council (ALC) has called upon the federal government to extend the JobKeeper Payment scheme to freight and logistics businesses as they are businesses providing essential services.

In a letter to Treasurer Josh Frydenburg, CEO of the ALC Kirk Coningham wrote that while freight and logistics businesses, including freight rail operators, have been deemed an essential service, they have missed out on government support for businesses.

“ALC is concerned that the blunt application of a reduced turnover test at 30 per cent for small and medium businesses and 50 percent for larger businesses to qualify for the JobKeeper Payment fails to adequately account for [freight and logistics businesses],” wrote Coningham.

While rail businesses and organisations welcomed the announcement of stimulus in March, some were concerned that the threshold would limit their ability to access the scheme and ensure workers who may need to be stood down are continued to be paid.

Coningham outlined that the particular circumstances of the freight sector means that stimulus is required.

“The reality is that most businesses within Australia’s freight and logistics sector operate on tight margins that flow from high fixed costs associated with the purchase and maintenance of freight vehicles, equipment and infrastructure.”

Since the coronavirus (COVID-19) pandemic has hit Australia, freight businesses in the rail sector have been called upon to ensure that essential goods such as groceries continue to get on the shelves of supermarkets around Australia. Rail has continued to play a role as borders have been closed and in some areas has seen up to a 15 per cent increase in services.

Coningham wrote to Frydenburg that if businesses such as these were allowed to fail there would be significant consequences.

“If major freight transport businesses are forced to close due to financial pressures arising from COVID-19, there will be a range of deleterious consequences for the entire supply chain, and the ability of Australian households to access essential goods in a timely fashion could well be threatened. Moreover, there would also be significant consequences for Australian exporters, who rely on freight and logistics service providers to take their goods to market.”

The ALC recommended that essential service providers be eligible for JobKeeper Payments automatically, that if a threshold is imposed it should be set at 15 per cent for businesses providing essential services, and ensure that the first two JobKeeper payments are done quickly.